The Dow Jones Industrial Average gained 206 points, or 0.81%, to 25,575, the S&P 500 gained 19 points, or 0.70%, to 2,768 and the Nasdaq Composite added 58 points, or 0.81%, to 7,212.

The S&P energy sector closed up 2% as Brent crude went above $70 a barrel for the first time since December 2014, boosted by a surprise drop in US production and lower crude inventories.

Oil-linked shares with big gains included Dow member Chevron, up 3.1%, Apache, up 4.7% and Schlumberger, up 1.9%.

The consumer discretionary sector saw strong gains in media and retail stocks, while the industrials index was helped by airlines after news from No. 2 US carrier Delta Air Lines (DAL.N).

Delta shares added 4.8% after it predicted a double benefit from the US corporate tax cut. It also reported an upbeat quarterly profit. American Airlines and United Continental also pushed sharply higher.

Industrial companies that advanced included Dow members Caterpillar and Boeing which won 2.0% and 2.4% and Cummins, which advanced 1.9%.

The major indexes pared gains briefly in late afternoon trading on Thursday after New York Fed President William Dudley said tax cuts could lead to economic overheating. He predicted above-trend GDP growth with rising inflation in 2018.

Investors are betting on bullish quarterly earnings reports from big companies and details on savings from federal tax cuts. The reporting season kicks off in earnest on Friday, with results from the big US banks JP Morgan Chase & Co (JPM.N) and Wells Fargo & Co (WFC.N).

In Asia, major markets clawed back slight gains on Friday in morning session, with the region tracking the strong lead from Wall Street.